Avoiding and Disclosing Possible Conflicts of Interest
Jeannine LeCompte; Compliance Research Specialist
A 2017 study on conflict of interest in the medical field, based on data from the CMS’s Open Payments reports of industry payments to physicians, found that 449,864 (approximately 48 percent) of US physicians received around $2.4 billion in industry-related payments—and that the actual figure was in all likelihood higher.
The numbers involved—in terms of individuals and the amount of money—means that it is inevitable that there are going to be conflicts of interest, either deliberate or inadvertent in nature.
Avoiding and disclosing possible conflicts of interest should be a priority for any organization seeking to avoid potential legal pitfalls. Once again, the best way forward is to have a written procedure for disclosing all possible conflicts of interest—and a way of evaluating each case individually.
Employees should be made aware of the need to promptly disclose any circumstance which might constitute a violation of guidelines as set out in the company’s code of conduct. As part of this disclosure process, employees should consult with the company’s compliance officer to determine if a conflict exists and, if so, how it should be resolved.
Whenever a director, officer, or member of senior management has a personal interest in another party that has, or may have, business dealings with the company, he or she should disclose that interest to the corporate secretary and, at the very minimum, refrain from participation in company business decisions regarding that party.
Whenever a director, officer, or member of senior management has a personal interest in another party that has received, or may receive, a charitable contribution from the company, he or she should disclose that interest to the corporate secretary as a matter of priority.
In such an instance, he or she should seek permission from the corporate secretary before engaging in any discussions with the company concerning charitable contributions to that party.
If a director, officer, or associate is in a position where access to company proprietary information may materially influence his or her decisions in another party engaged in business or competition with the company, he or she must decline that information. Proprietary information includes financial, marketing, customer, pricing, medical management, or operations information and strategic plans and initiatives which are important to the company or any of its affiliated organizations.
Directors, officers, and members of senior management should also complete an annual statement, in a form prescribed by the company, disclosing financial, personal, and other interests and relationships that may present a conflict of interest.
Any change to the information set forth in the annual statement should be disclosed to the corporate secretary as soon as possible.
It is only by ensuring that all possible conflicts of interest are reported before they become legal issues, that major damage to individuals and the facility can be avoided.
The final component of a disclosure process is determining if the reported issue is a genuine conflict or otherwise. As it is obviously not possible to list every way in which a conflict of interest may arise, each instance must be evaluated on its own merit. The duty of making this determination will, in all likelihood, fall onto the shoulders of the compliance officer.
